This is how I do it (and Photoshop has nothing to do with it).

1a. I open the BMP/DDS files with DXTBmp.exe (you can download it from here: http://mwgfx.co.uk/download/dxtbmpxnew.exe).
1b. When opening the BMP/DDS files, I right click on them and select *Open with
2a. To convert a BMP to DDS DXT1/DXT3/DXT5 (with Alpha), from the menu I select Image > Flip Image and Alpha
2b. To convert BMP to DDS DXT1 (no Alpha), from the menu I select Image > Flip Image (seeing as you won't be using the Alpha, there is no need to Flip it!.
3.   I then select File > Save as > DDS Texture, and then select, from the Save as type:, either DXT1 (no alpha), DXT1, DXT3 or DXT5, and then click on **Save.

* The first time you want to open BMP/DDS files with DXTBmp.exe, you will need to browse for it, so make sure you take note of where it gets installed (mine is NOT in the default location). Once you've done that the first time, DXTBmp should be available in the list for opening BMP/DDS files. I actually chose DXTBmp to be the default program for opening DDS files, so I only need to double click on them to get them open in DXTBmp.

** If I have opened the file in DXTBmp using the right click Open with, it will automatically want save it in the folder from where it was opened. Seeing as the BMP files are being saved as DDS, you don't need to worry about the original BMP file as it will nt be changed, but if you are saving it as a modified DDS file, then it will sk to overwrite the original file, so make sure you back up all the original files BEFORE making any changes to them!.

I hope these instructions are clear enough for you so you can do it yourself. Please let me know if they aren't clear enough! ;)